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February 19, 2013

Nonprofits Under Pressure to Generate Revenue, Improve Programming

Laser-focused operations and execution a top priority in 2013

Leaders of U.S. nonprofits are rethinking revenue, improving program results and expanding development initiatives this year, according to a new survey.

Forty-six percent of respondents were reconsidering their revenue model and income generation, and 44% were expanding development initiatives. Forty-six percent said they were focused on improving program results and metrics.

Veris Consulting, a specialist in outsourced financial management and survey research for nonprofits, and Brittenford Systems, a technology systems provider for nonprofits, surveyed senior officials at charities, national membership and trade associations and policy organizations around the turn of the year.

The report found that nonprofits are under pressure to pursue comprehensive strategic planning, sophisticated development strategies and sharp execution in 2013.

The findings showed that organizations needed to implement a more disciplined approach when building out revenue streams, for example by tailoring approaches to deepen relationships and connect strategically with current and prospective donors.

Only 53% of respondents said they distributed their management and board reports on a monthly basis, with 40% reporting on key operational metrics.

The report said that although real-time dashboard reporting among larger nonprofits had increased, the majority still needed to progress toward more timely, detailed reporting to allow leaders to improve forecasting and strategic decision-making.

The hiring outlook at nonprofits was stable, according to the report, with 27% planning to add one or two staffers and 13% looking at three or more new hires. Fewer nonprofits planned to reduce their staffs than in 2011.

Nearly three-quarters of respondents forecasted growth in 2013, up slightly from 2011; but more predicted slow or no growth compared with the earlier period.

“Interestingly, 72% of nonprofits are planning for growth, but only 40% plan to hire,” John Gillespie, managing director for CFO practice at Veris Consulting, said in a statement.

“This indicates that nonprofits are still under-resourced and struggling to master revenue generation. There is a real need for nonprofit CEOs and boards to embrace a more disciplined approach to strategic planning, laser-focused fundraising and allocating resources to ensure success.”